CEXIM at the Crossroads of the Eurasian Belt

English2019. dec 8.Növekedés.hu

Changhui Zhao, chief risk analyst of the Export-Import Bank of China was invited as a distinguished guest and a panel discussion speaker to the Budapest Eurasia Forum 2019, that took place from 29 to 31 October in the Castle of Budapest. The comprehensive summit, organized by the Central Bank of Hungary provided a vital platform for discussion, connecting leading financial, educational and cultural professionals from the Eurasian region. Following the event, Mr. Zhao gave an exclusive interview to Növekedés.hu, where he was asked about the role and profile of CEXIM, China’s second largest actor in financing the projects of the ’Belt & Road Initiation’.

Briefly summarizing the mission of the Bank, Mr. Zhao Changhui told us that the Export-Import Bank of China (CEXIM) grants the basic financial instruments for government and business stakeholders to facilitate the implementation of China's global strategy.

Their primary objective is to support the operations of the entire Chinese business community in distinctive marketplaces worldwide.

Due to proper governance policy and a well-defined business portfolio, the Bank holds a clear-cut market position. Strict internal control allows CEXIM to operate safely and viably, offering high-quality services to a variety of actors, such as: foreign trade partners; cross-border investors, participants of cultural-scientific and technological development projects; industrial corporations as well as SME businesses and enterprises.

Concerning their involvement in ’Belts and Roads’ (BRI), Mr. Zhao Changhui reminded Növekedés.hu, that CEXIM is a key actor in China’s flagship initiative.

Their contribution to BIR by now exceeds 1 trillion yuan ($149 billion), encompassing more than 1,800 “Belt and Road” projects.

Besides rendering various forms of financial assets – direct loans, special loans, funds, guarantees, forfeiting, inter-bank borrowing and lending, syndicate loans – the Bank also provides financial advisory services, country risk guidances, and supports economic recovery programs. The latter often combines with sustainability aspirations, particularly green credits, clean energy and inclusive growth projects.

Mr. Zhao Changhui emphasized the pioneering role of the Chinese Export-Import Bank in green economy promotion. They not only did prepare their White Paper on Green Finance, but took an active part in creating the Equator Principles under UN and the emerging Green Growth Accord by UNEP.

Since their debut (2016) in the green bonds market, when CEXIM issued 5-year-maturity bonds of RMB 1million, the Bank’s loan balance from its green credit business had gone up to RMB 100 billion by Dec, 2017.

Green financial services extend to low-carbon industry, cyclic resource management, green transportation, pollution control, renewable energy, water conservation and social benefit investments. Moreover, China’s Green Finance Committee (the Green Finance Committee of China Society for Finance and Banking) has announced GIP (the Green Investment Principles for the Belt & Road), a comprehensive investment strategy to involve as many best practices in ”greening” the BRI region as possible.

Green investment connects to smart industry, sci-tech innovation, digitalization, AI-based processing trends and emerging technologies as well – which the Chinese Export-Import Bank also readily facilitates.

CEXIM is responsive to pressing public demand for cutting-edge intelligent services and scientific technology drivers. Via its ”going global” program, the Bank engages with competitive startups and domestic SMEs, boosting their market penetration and financially backing their step-out onto the global scene. A complex portfolio has been developed in support of micro and small enterprises (MSE), from direct lending products to interest rate pricing management, from big data services to credit risk control. On the other hand, CEXIM’s involvement in joint national projects, e.g. the construction of Western China Science and Technology Innovation Harbor, serves the aim of regional development through substantial increase of knowledge capital and R&D&I capacity.

CEXIM likely incentivizes featured industrial stakeholders, consistent with the Central government’s poverty alleviation policies – Mr. Zhao Changhui noted.

In close cooperation with regional and local authorities such as NDRC, financial assistance to targeted economic sectors is prioritized, enhancing the implementation of policy-based development in impoverished areas.

Thus, socioeconomic disadventages and regional disparities get compensated by leveraging synergies between rising sectors.

Finally, Mr. Zhao Changhui was asked about the risks and potentials of CEXIM’s operation in the Central-Eastern European region. In terms of risks, he talked about three major factors they consider:

1) the presence of ’a strong strategic vision’ vs the ’lack of strategic direction’;
2) proof of political strength vs. signs political impotence;
3) progressive politico-economic trends vs. pushback effects in policy environment.

He referred to the wide spectrum of bi- and multilateral agreements, trade and business contracts, loans and other investments already executed within CEEC.

Finally, he expressed the commitment of the EXIM Bank of China to strengthen the cultural-economic ties between China and Hungary, proceeding successfully, in mutual respect along new ’Belts and Roads’ pathways.